An agreement between a private party and the Central or State Government in the exercise of their executive power is enforceable only if it complies with the mandatory requirements of Article 299 of the Constitution of India.

VEERASWAMI, J. : The controversy in this appeal by the plaintiff is as to the rate of commission at which he is entitled to be paid for certain auction sales of evacuee properties in Madras, Bangalore, Mysore, Ootacamund and Coonoor, which he held in five batches between February 22, and June 26, 1955, on behalf of the defendant. He has been paid at one per cent of the sale proceeds in respect of the first batch of sales held between 22-2-1955 and 26-2-1955 at Madras. With regard to the other batches of sales between 7-4-1955 and 16-4-1955, 26-4-1955 and 1-5-1955. 9-5-1955 and 15-5-1955, and 26-6-1955 and 27-6-1955, the defendant paid the plaintiff only a sum of Rs. 7,324,56 against a claim of Rs. 23,098-35. The suit is to recover the difference, the main ground of the appellant being that there was no reason to make a distinction between the sales made prior to 1-4-1955 and those subsequent thereto, as the work involved in respect of both the sales was just the same, and there was no reason with the general rule as to the reasonable quantum of remuneration payable in respect of sales should not be applied. On the ground that certain sales held on 28-4-1955 and 10th, 12th and 13th May 1955, were for prices below 60 per cent of the reserve price, the defendant denied liability to any commission whatever. The plaintiff contended that the sales were effected by him not gratuitously and was, therefore, entitled to a reasonable remuneration.

2. The suit was resisted by the defendant pleading An agreement fixing the rate of compensation and stipulating that for sales fetching prices less than sixty per cent of the reserve price no commission would be payable. The agreement set up was that the plaintiff had agreed to receive commission at such rate as the Government might fix.

3. The court below framed a number of issues on those pleadings, but substantially it found that the agreement set up by the defendant was true and that remuneration already paid to the plaintiff was in accordance therewith. On that view it dismissed the suit.

4. On behalf of the plaintiff, who has appealed to this court, his learned counsel Mr. K. Rajah Iyer, contends (1) that if there was a concluded agreement between the plaintiff and the defendant fixing the rate of commission, it was void for non-compliance with the mandatory provision of Art. 299 of the Constitution, and that as the work done by the plaintiff was not intended to be gratuitous, he was entitled to commission at a reasonable rate; (2) that, alternatively, if the agreement was, for any reason, valid, it failed to fix a rate of commission, and that, in any case, the parties meant that a reasonable rate of commission would be paid for the work done by the plaintiff. On the other hand, the learned Government Pleader contends that, though there was no formal agreement drawn up and executed, there could be a valid agreement entered into by correspondence between the parties after conforming to the requirements of Art. 299 of the Constitution, and that an agreement by which the plaintiff agreed to accept such rate of commission as may be fixed by the defendant is valid and it is not open to the court to depart from its terms and tenor and fix a rate which it may consider to be reasonable.

5. Before we examine these contentions, a few more facts may be noticed. The plaintiff was appointed as a commission agent by the Regional Settlement Commissioner, Bombay, acting for the Government of India, Ministry of Rehabilitation, by a letter dated 28-1-1955. The appointment was restricted to the conduct of auction sales of evacuee property, and buildings in Madras from 22-2-1955 to 26-2-1955, and the letter said that the plaintiff would be given commission on the auctions as would be fixed by the Government of India from time to time. On 12-2-1955, the Deputy Secretary to the Government of India, Ministry of Rehabilitation, by a letter of that date, asked the plaintiff's concurrence to and execution of